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| Subject: Stock Buybacks In some countries, including the United States and the United Kingdom, corporations can buy back their own stock in a share repurchase, also known as a stock repurchase or share buyback. There has been a meteoric rise in the use of share repurchases in the U.S. in the past twenty years, from $5b in 1980 to $349b in 2005. A share repurchase distributes cash to existing shareholders in exchange for a fraction of the firm’s outstanding equity. That is, cash is exchanged for a reduction in the number of shares outstanding. The firm either retires the shares or keeps them as treasury stock, available for re-issuance. Under U.S. corporate law there are five primary methods of stock repurchase: open market, private negotiations, repurchase put rights, and two variants of self-tender repurchase, a fixed price tender offer and a Dutch auction. (Wikipedia Feb 2010) US Equity Market By John Schroy, on March 8th, 2006 |  Leave a comment  Over the last five quarters, the annual rate of dividends paid by US non-financial corporations has fallen by two-thirds, from $462.2 billion to $160.5 billion. The apparent reason for this negative trend is the intent of corporate management to radically increase stock buybacks in order to boost the value of executive options. March 8th, 2006 | Print Article |  Email Article |  Topics: Corporate Governance, dividends, executive stock options, Interest Rates, intrinsic value, John Burr Williams, market manipulation, mutual funds, price earnings ratios, Stock Buybacks | Category: US Equities | Leave a comment |  Short urlFund management By John Schroy, on March 7th, 2006 | Leave a comment  Legg Mason, the giant asset management company that was recently sold off by Citigroup, issued a report on January 10, 2006 by Michael Mauboussin, Chief Investment Strategist, entitled, “Clear Thinking About Share Repurchases”. The general tenor of the Legg Mason commentary seems to be favorable towards buybacks, especially extremely large buybacks that are aggressively pursued and that, presumably, are more effective in jacking up stock prices and making investment managers look good. March 7th, 2006 | Print Article | Email Article | Topics: capital flow analysis, Citigroup, debt/equity ratio, dividends, executive stock options, intrinsic value, Legg Mason, market manipulation, mutual funds, Stock Buybacks | Category: Stock Buybacks | Leave a comment | Short urlUS Equity Market By John Schroy, on March 6th, 2006 | Leave a comment  On January 28, 2006, an Associated Press dispatch proclaimed: “Corporate Earnings Good Despite Headlines”, stating that “corporate profits remain very healthy overall, and the majority of corporations are beating expectations.” Are these assertions true and does this mean that the outlook is rosy for the average investor in US equities? This article argues that the answer depends on who you are. March 6th, 2006 | Print Article | Email Article | Topics: Asset-lite Movement, cash flows, Corporate Governance, depreciation, dividends, earnings-per-share, executive stock options, Legg Mason, pension plans, price earnings ratios, profits, Stock Buybacks, US SEC, US taxation | Category: Security Analysis | Leave a comment | Short urlFeatured articles on inside pages
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